Oil prices have hovered around US$40/barrel, but have so far resisted plunging much below that level. The trend over the past few weeks is attributed to declining production in the US, though at a slower rate. During this past week, crude inventories leveled off after several weeks of gains, but bearish sentiments prevail.
There is a report of yet another bearish prediction for crude oil that prices may drop to as low as US$20/barrel. While there is not a lot of room on the upside for prices, the fears of downslide are on the rise.
Reportedly 37 oil and gas companies have filed for chapter 11 bankruptcy protection so far this year, as low crude prices impairs their ability to sustain. The bankruptcy cases account for more than US$13.1 billion in outstanding debt among the companies involved.
Mexico’s state-owned oil company Pemex announced that it would be willing to market oil and gas extracting from producers that win an upcoming auction in December. A larger number of companies are expected to participate, including some smaller upstream companies.
Venezuela’s financial position continues to deteriorate ahead of a December election. The situation has become so bad that some oil suppliers are requiring prepayment for selling crude or refined products to Venezuela.
Saudi Arabia is showing all signs of sticking to its guns when OPEC meets in the next few weeks in Vienna. The powerful OPEC member is pursuing market share. At the same time, the Saudi oil minister warned about a future supply crunch as the industry fails to adequately invest in new sources of production. He believes at least US$700 billion will be needed to meet rising demand.
Argentina is about to elect a new President, and it is increasingly showing signs of progress in its oil and gas development. The vast shale formation could allow Argentina to become the first country to truly scale up shale oil and gas drilling outside North America. A report predicts that oil and gas production will rise by a modest 10 percent in 2016, but will double by 2018.
China slashed natural gas prices this week in order to stoke demand. The country cut gas prices for industry and commercial consumers that translate into a 28 percent cut. This may help in boosting demand for natural gas, but will also reduce revenues for upstream gas companies.